HARD HIT RETAILERS SUBSIDISE THE PROSPEROUS PRIME

Professional Services News

Following the much publicised two year delay on Business Rate Revaluation from 2015 to 2017, research by the Grimsy Review Co-Author Paul Turner-Mitchell has found that the High Streets that have been negatively affected by the downturn are effectively subsidising prosperous High Streets.

The current rateable values are based upon rents on all High Streets from April 2008, nearly 6 years ago in which the fortunes of our high streets have changed somewhat! The delay to the revaluation is effectively delaying a revision of the rateable values to their appropriate levels.

It is the case that the countries most prosperous High Streets such as Bond Street, where rents have risen on average 70% since April 2008 do not have rateable values corresponding with the rental levels.  In contrast the hardest hit High Streets such as those around Greater Manchester which have seen an average fall in rental values of approximately 30% are still paying business rates based on the higher values from 2008.

It is therefore the case that the most prosperous areas are paying artificially low business rates whilst the weakest areas are paying an artificially high rate.

Alastair Fearn, part of FHP’s Business Rates Team said “The Government has faced heavy criticism over business rates policy and whilst the delay in the revaluation is fixed for the foreseeable future the Government has recently announced that they will cap business rate rises at 2% in contrast with the current practice of business rates rising in line with inflation.  This is a solution favoured by the British Retail Consortium as opposed to the Grimsy Report which called for a freeze on business rates.”

The FHP Business Rates Team act for retailers Nationwide who trade from a variety of locations from popular High Streets, Shopping Centres to more tertiary and secondary locations.  The effect of the changes in the market and a rigid business rates structure have therefore affected our clients differently.  In each instance we have been able to use our knowledge and expertise to keep business rates expenditure as low as possible through: –

v  Compiled List Appeals

v  Placing Appeals following a material change of circumstances

v  Empty rates mitigation

For further information on how we can help you please contact the FHP Business Rates Team on 0115 950 7577.